Wheelock Street Capital closes on first fund

Published 9:55 pm, Tuesday, July 3, 2012

Wheelock's commitments come from an array of investors, including foundations, alternative asset managers, endowments, pensions and family offices. In turn, Wheelock plans to invest in real estate assets across the country, either directly or through joint venture partners in varying transaction types and capital structures, like acquisitions, recapitulations and restructurings.

The $525 million represents an increase in the fund's size, driven by increased demand after the first closing in 2011. Wheelock Street Capital, with headquarters in Greenwich and Boston, had originally targeted $500 million.

"We were fortunate to have gained momentum at the outset of the raise due to support from key lead investors," Rick Kleeman, one of Wheelock's co-founders and managing partners, said in a statement.

Wheelock Street Capital, started in 2008 by Kleeman and Jonathan Paul, teams with operating partners to tap into opportunities in all asset classes, but they have a specialty in developing internal operating platforms in the areas of residential land and hospitality. This caters to Kleeman and Paul's prior experience. Both previously served as senior partners at Starwood Capital Group, Westbrook Partners and Rockpoint Group.

The level of interest in Wheelock Street Real Estate Fund bodes well for its future, as well as the firm's reputation as a source of capital, according to Paul.

"We believe that at this level of capital commitments, the fund is well positioned to capitalize on current market opportunities while maintaining a high level of selectivity and focus," Paul said.

Commercial real estate is becoming an appealing, and apparently more stable-looking investment option, which could work in Wheelock's favor, according to Walter Dolde, finance professor at UConn-Stamford.

"Right now, the bond market is very unattractive, interest rates are very low, so you don't get paid much and there's not much capital gain," he said. "The stock market is about fairly priced, but there's a lot of uncertainty about the Euro in particular, so investors are looking for some place with a more attractive risk/return profile, and commercial real estate could be one of those."